Define footer - Name of the presentation / Your name / Unit, Office 1 Finance (Basics) Josef Nešleha and Luděk Benada Department of Finance Office no. 433 josef.nesleha@econ.muni.cz Define footer - Name of the presentation / Your name / Unit, Office 2 Organisation of the course §Lectures + seminars §Requirements – compulsory parts §Active participation in seminars (Students are allowed to skip 3 lessons without any excuse) §Taking two tests (in the 5th and in the 10th week of the semester) §Final exam §Evaluation §Test I – 20 points §Test II – 20 points §Final exam – 30 points §Two pieces of homework – 5 + 5 points §Essay on a related topic – 10 points §Presentation of the essay – 10 point § § Essay + presentation §(Optional part) §Two pieces of homework during the semester §Essay §having approximately two A4 pages §Essays will be presented (oral presentation) in the lesson during the semester (according to the schedule which will be set during the first two weeks) §Each essay has to be supported by literature sources, has to be topical and in accordance with citation rules §For further information, see the file “Essay – topics” §Recommended participation in lectures § 3 Define footer - Name of the presentation / Your name / Unit, Office Final mark Final score Mark 100 – 90 A 89.75 – 80 B 79.75 – 70 C 69.75 – 60 D 59.75 – 50 E <50 F Define footer - Name of the presentation / Your name / Unit, Office 4 Students are allowed to re-sit: Test I + Test II (one attempt; students will be given one piece of test, covering the whole semester). It is not possible to resit any of the tests separately. Final exam Final exam §Computer based exam §Maximum number of points: 30 §One term in December + 3 terms in January §“Close books” exam §Sample examples will be accessible three weeks before the exam 5 Define footer - Name of the presentation / Your name / Unit, Office Structure of lectures qIntroduction to finance qFinancial markets qBanks and bank systems qOther financial institutions qPresent value of money qPrivate finance qInvestments qCorporate finance qInternational finance qInternational financial system qMacroeconomic and financial indicators and information qHistory of financial science qLatest trends on financial markets § Define footer - Name of the presentation / Your name / Unit, Office 6 Finance §Finance §Finance describes the management, creation and study of money, banking, credit, investments, assets and liabilities that make up financial systems, as well as the study of those financial instruments. §Functions of finance §Promoting investments and savings §Providing borrowers with funds §Providing lenders with earnings §Facilitating of loans §Facilitating balanced economic growth Define footer - Name of the presentation / Your name / Unit, Office 7 Finance = money? §Is this equation always true? § §Cash vs. Credit money §Functions of money: §Medium of exchange §Unit of account §Store of value 8 Define footer - Name of the presentation / Your name / Unit, Office Scope of finance q Corporate Finance q International Finance q Private Finance q Public Finance q Derivatives q Risk Management q Portfolio Theory q Asset Pricing q Financial Economics 9 Define footer - Name of the presentation / Your name / Unit, Office Indicators §GDP (gross domestic product) §GNP (gross national product) §Inflation §Rate of unemployment §Rate of labour activity §Rate of employment 10 Define footer - Name of the presentation / Your name / Unit, Office Financial market §= A financial market is a market in which people trade financial securities, commodities, and other fungible items of value at low transaction costs and at prices that reflect supply and demand § §Roles of financial market §Transfer of resources §Price determination §Productive usage §Enhancing income §Information § 11 Define footer - Name of the presentation / Your name / Unit, Office Primary and secondary market §Primary market §New issues and new claims §Those securities which are issued for the first time § §Secondary market §Secondary sale of securities § § 12 Define footer - Name of the presentation / Your name / Unit, Office Types of financial markets §Money market §Capital market §Derivative market §Financial service market §Depository market §Non-depository market 13 Define footer - Name of the presentation / Your name / Unit, Office Financial derivatives §= financial products which are used to control risk or paradoxically exploit risk §= based on time discrepancy §Types §Future §Forward §Swap §Option •Call option •Put option 14 Define footer - Name of the presentation / Your name / Unit, Office Members of financial market §Surplus part (lenders) §Deficit part (borrowers) §Banks/institutions §Importer/exporter §Speculators §Governments 15 Define footer - Name of the presentation / Your name / Unit, Office Nominal and real interest rate §Nominal interest rate §Cost of loan §Interest rate offered by banks §Real interest rate §Real interest rate = nominal interest rate - inflation 16 Define footer - Name of the presentation / Your name / Unit, Office Thank you for your attention 17 Define footer - Name of the presentation / Your name / Unit, Office References §MISHKIN, Frederic S. Financial markets and institutions. Eight edition, global edition. Boston: Pearson, 2016. Always learning (Pearson). ISBN 978-1-292-06048-4. § § Define footer - Name of the presentation / Your name / Unit, Office 18